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Changes in the breakdown of the cashless payment amount and cashless payment ratios by numerator | Source: Japan\u2019s Ministry of Economy, Trade and Industry<\/a><\/p>\n It was a nod to what\u2019s becoming increasingly difficult to ignore lately. The country once known for clinging to paper yen has been shifting fast. Government data showed<\/a> cashless payments jumped to 42.8% of all transactions in 2024, nearly tripling from just over 13% in 2010. Japan even hit its official 40% target a year ahead of schedule.<\/p>\n The Bank of Japan isn\u2019t making any promises just yet. It hasn\u2019t decided whether it\u2019ll actually roll out a digital yen \u2014 basically its version of a central bank digital currency \u2014 but the pilot program that kicked off in 2023 is now running at full speed.<\/p>\n While BOJ officials aren\u2019t embracing crypto as a replacement for fiat, their growing support for a digital yen suggests they see decentralized assets as a serious contender in the payments space.<\/p>\n Kamiyama says the BOJ needs to consider how to keep the retail payments system \u201cconvenient, efficient, accessible universally, while being safe and resilient.\u201d That\u2019s where things get more speculative.<\/p>\n Future where crypto wins<\/p>\n Speaking over the weekend, BOJ Deputy Governor Shinichi Uchida suggested something rarely said aloud by a central banker in Japan: if the BOJ fails in its core duty \u2014 price stability \u2014 people might stop trusting the yen. And in that case, he warned, another instrument could step in.<\/p>\n In a digitally advanced society, Uchida said, there is \u201cno guarantee that currency issued by the central bank of a sovereign nation will continue to function as a generally acceptable payment instrument.\u201d Although he didn\u2019t drop any names, but he did suggest that cryptocurrencies and stablecoins might eventually step in to fill the gap.<\/p>\n Still, Uchida was careful to say he doesn\u2019t expect cash to disappear \u201cany time soon,\u201d but the fact that he raised the prospect of crypto overtaking the yen \u2014 hypothetically or not \u2014 says a lot about how the conversation is shifting in central bank circles.<\/p>\n Where things stand now<\/p>\n As of mid-2025, Japan\u2019s economy remains fragile. Inflation has been volatile, hovering<\/a> just above 2% in recent months. Growth is slow, and the BOJ is still navigating the long tail of post-pandemic stimulus policies.<\/p>\n In that environment, digital payments have gained ground, not just through CBDC discussions, but in the real economy. Local surveys suggest younger consumers are increasingly turning to mobile apps and QR code systems. Crypto use is still modest compared to South Korea or the U.S., but it\u2019s growing.<\/p>\n Trading volume of number of Japanese crypto accounts | Source: Bitbank Ventures<\/a><\/p>\n According to a report<\/a> from Bitbank Ventures, there are over seven million active crypto accounts in Japan as of December 2024, up from five million in early 2024. Bitcoin (BTC<\/a>) and Ethereum (ETH<\/a>) remain the most commonly held, but stablecoins pegged to the yen or dollar are also gaining traction in cross-border commerce and remittances.<\/p>\n And then there\u2019s regulation. Japan has long had some of the tightest crypto rules in the world. But lately, regulators have shown more flexibility<\/a>, especially when it comes to stablecoins and their role in payment infrastructure.<\/p>\n The CBDC question<\/p>\n Even as crypto adoption rises, the BOJ is still very much focused on its own digital offering. The CBDC pilot is still in its active phase, involving tests with major Japanese banks like MUFG, SMBC, Mizuho, along with regional banks and fintech firms.<\/p>\n And while the digital yen isn\u2019t live yet \u2014 and there\u2019s still no official launch date \u2014 BOJ officials have been speaking out more about why it matters and the role it could play in Japan\u2019s future economy. Uchida called the CBDC a \u201ccritical piece of infrastructure\u201d that could help maintain public trust in the yen. Still, he emphasized that demand for cash will likely remain strong. At least in the near term.<\/p>\n Globally, the race is also heating up. The European Central Bank is doubling down on plans for a digital euro. And in the U.S., President Donald Trump\u2019s executive order<\/a> banning a digital dollar has expectedly pushed the debate forward \u2014 by politicizing it. His move, seen by some as an endorsement of crypto and stablecoins, is prompting other central banks to act faster.<\/p>\n![\"Japan's](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/06\/jsdu9f0sdu.png\")
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